Is a “Wealth Tax” Constitutional? - Part 2
Bottom Line: Having established that a federal income tax wasn’t even constitutional until the ratification of the 16th Amendment in 1913, clearly the principal of limited taxation was at the heart of the founding of this country. After all, remember the American Revolution began over the perception of punitive taxation? So, is the concept of a wealth tax which would tax one’s net worth beyond a determined threshold double taxation? Is it constitutional?
Certain attempts at double taxation have been legally challenged and found to be unconstitutional. The most recent pertained to businesses in a Supreme Court ruling in 2015, Comptroller of the Treasury of Maryland v. Wynne. That example also holds the key to the answer to your question. We can read the constitution and infer what we want from it, however there’s nothing that prevents congress and the president to enact law that’s potentially unconstitutional. Instead, if a wealth tax were to become law, it’d be up to a legal challenge that’d likely lead to a determination in the US Supreme Court. Until that's determined it’s all speculation. And remember, even being on the right side of the constitutional arguments in matters of taxation can lead to unexpected outcomes. Those of us who thought the Affordable Care Act was unconstitutional were correct. The Supreme Court ruled as much. But instead of striking the entire law down,the law was altered by the high court to make it constitutional. In other words, there are no guarantees, except death and taxes, right? It’s a reminder that elections have consequences and we can never take our liberty for granted. We’re always only one election away from it potentially being imperiled.